For the California citrus industry, COVID-19 and the severe Western drought have resulted in staggering increases in farming and production costs for growers and minimal price correction in the market, according to California Citrus Mutual.
An internal industry survey of California citrus growers conducted by California Citrus Mutual, published in September, found that, on average, farming costs for the 2020-21 season increased by nearly $1,000 per acre. This represents a 19% increase since the start of the pandemic.
According to the survey, the two largest cost drivers for growers are water and shipping. The survey found the spot market for surface water has increased 400% and in many cases surface water is not available at all. Shipping costs are up as much as 380%, CCM said, compared with the start of the pandemic due to the limited supply of containers and delays at ports around the world.
Meanwhile, the survey found fertilizer costs are up 49% compared with March 2020 and diesel fuel costs are up 38%, leading to additional costs throughout the supply chain.
“You name it, everything is in short supply,” said Casey Creamer, president and CEO of California Citrus Mutual.
Given the fact that the crop size will be smaller, and costs are going up, Creamer said there is no choice but for growers to pass on higher prices to consumers and the marketplace.
Creamer said he is optimistic about the future but says there could be tough times ahead.
“Growers are pretty resilient people, and we find a way to make it work through all the difficulties that we have. We grow the best citrus anywhere in the world and it is in high demand,” he said.
“Through all the ups and downs, I think we’ll survive this and have a strong outlook for the future.”
